Coastal communities begin receiving heat pump grants

Alaskan Households Start to Benefit from Electric Heat Pump Grants

An initiative by two Alaskan nonprofits has commenced distribution of grants for the installation of new electric heat pumps in homes across the state, including locations such as Metlakatla, Kodiak and Wrangell.

The grants, which are valued between $4,000 and $8,500 per household based on income, aim to alleviate home heating costs and curb pollution originating from the burning of fossil fuels.

The coastal Alaska program is in its early stages with funds having been disbursed or set aside for approximately 15 installations as of December 2, according to Jessie Huff, energy program manager for the Southeast Conference.

Huff disclosed to the regional economic development nonprofit’s energy committee that there are currently “at least 300 applications in the works.”

In a joint effort, the Southeast Conference and Alaska Heat Smart, a nonprofit committed to reducing living costs and promoting the use of clean energy, were granted $38.6 million federal fund last year. The grant is intended to subsidize the cost of energy-efficient heat pumps for 6,000 households in 43 coastal communities.

Huff pointed out that about four or five households in Wrangell have already made submissions. The application process involves submitting proof of income to determine the level of assistance eligible and a record of heating costs for the home assessment procedure.

The maximum grant amount of $8,500 is reserved for households earning below 80% of the area’s median annual income, which fluctuates from community to community. For instance, in Wrangell, the largest grant threshold is set at $53,950 for a one-person household, $61,650 for a two-person household, with the amount increasing for larger households.

Applicants whose annual income exceeds the low-income threshold could be eligible for a $6,000 or $4,000 grant, based on their income level. Any costs exceeding the grant amount fall under the responsibility of the homeowner. The Southeast Conference is collaborating with interested credit unions and banks to develop loan programs for heat pump conversions, Huff added.

One distinct advantage for low-income households is that they don’t have to make payments to the heat pump contractor upfront – the program would pay the contractor directly. All other grant recipients must make payment to their contractor themselves and submit receipts for reimbursement.

The incentive program, titled ‘Accelerating Clean Energy Savings’, does not extend to commercial properties.

The initiative is financed by a grant from the U.S. Environmental Protection Agency through the nationwide Climate Pollution Reduction Grant program. The 2022 Inflation Reduction Act has allocated nearly $5 billion for this program to help states, local governments, tribes, and territories reduce greenhouse gas emissions and help curtail energy costs.

Heat pump installations replacing diesel, propane, or wood heat are eligible for individual grants, given the program’s aim of reducing fossil fuel consumption. Prospective applicants must complete the application, income verification, and home assessment processes, and obtain final approval before purchasing materials or initiating installation. Installations begun prior to receiving approval do not qualify for an incentive payment.

For more information about the program and to begin the application process including income verification, individuals can visit Akheatsmart.org/aces/.

An initial home assessment required for the application will be conducted by the Heat Smart team, which will request utility bills and the size of the home.

Low-income households qualifying for the larger grant must wait for an approved contractor to complete the work; other program participants can select a contractor from Heat Smart’s list or hire their own contractor.

This stipulation poses a limiting factor for people qualifying for the low-income grants, who need to wait for a contractor to accept the job. Huff noted the shortage of active low-income heat pump installers in certain areas, with only Juneau, Ketchikan, and Sitka currently having approved contractors on the list, though Kodiak is expected to join shortly.

An ongoing effort is underway to secure a contractor in every town. Currently, there are no Wrangell contractors on the list, which implies a low-income grant recipient in Wrangell would have to wait for a contractor to be added to the Heat Smart qualified list, or for the program to accumulate enough installations in Wrangell to warrant the travel expense of an out-of-town contractor.

Despite the grant being awarded over a year ago, there was uncertainty earlier this year about the continuity of the program under the President Donald Trump administration. The federal funding was frozen twice in the past few weeks due to the new administration’s orders to halt federal contracts, loans, and grants, according to Robert Venables, Southeast Conference executive director. However, he confirmed in early March that the funding was reinstated.

The original version of this story was published by the Wrangell Sentinel.